Hibbing arts nonprofit settles over misused funds, failed board oversight

HIBBING — The Minnesota Attorney General’s Office announced it reached settlement agreements with a Hibbing-based nonprofit and its founders over misused funds.

The Borealis Art Guild was formed in 2015 and founded by George and Georgia Andria with the primary charitable purpose of fostering the arts. The organization operates arts classes and programs in Hibbing.

In a news release, the attorney general's office said a Charities Division investigation found, among other problems, that nearly $139,000 in Borealis assets were spent to improve a building owned by the Andrias. These improvements primarily benefited the Andrias and not the nonprofit.

The investigation also found the nonprofit’s board of directors failed to oversee the Andrias, removed directors who asked questions about finances, and did not register Borealis with the AG’s Office, as is required for most Minnesota nonprofits.

In addition to repaying Borealis within 30 days of the court's approval of the agreement, the Andrias agreed to resign from the board or leadership positions, if they had not yet done so; surrender control over Borealis’ financial assets and accounts; and not form any new nonprofit or act as an officer in any existing nonprofit.

In a separate settlement called an Assurance of Discontinuance, the Borealis board agreed to comply with state law and ensure financial training and transparency policies for the board going forward.

The attorney general's Charities Division has civil enforcement authority under the state’s nonprofit corporation, charitable-solicitation and charitable-trust laws. The Charities Division does not enforce criminal laws.

Under Minnesota law, nonprofit board members and executives owe fiduciary duties to act in the best interests of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests.

The public may submit complaints to the attorney general about nonprofit directors and officers who misuse assets or fail to put the charity’s interests before their own. Complaints may be submitted by using a form on the Attorney General’s website. Minnesotans may also contact the Attorney General’s Office by calling 800-657-3787 (Greater Minnesota) or 800-627-3529 (Minnesota Relay).